San Marcos Sale – Something aint right

[admin]

All,

The home at 362 Edgewater Dr, San Marcos, 92078 was for sale for nearly a year before it finally closed on February 9th. This sale is EXTREMELY fishy, considering the following:

-Starting price in 2/06 was approx 710-720k

-Over 6 months, price was reduced to approx 700k, 680k, 660k, and finally to a range of approx 590-640k. It sat unsold even at that price. It was listed in the high 500s in 2007!

-Owner then tried to rent, with no luck, then relisted again (I saw a for sale sign, then a rent sign, then both at once, and finally a for sale sign again over the course of 6 months.)

-Home is undesirable – backs up to Sprinter train, no upgrades, small yard.

-Nicer neigboring homes are selling for less, like the mid 600s for example for more sqft and yard.

Note: Another strange thing…Same neighborhood, same model/size home a street away, 342 Flower Hill Way, sold for the same price one week earlier.

Something is not right here. I know this area well and can tell you without a doubt that this home did not truly sell for 710k. Anyone have access to more resources to see what really happened?

[Anonymous]

More to back up my suspicions:

-In October 2006, This home was featured on the house flipping web site below. How could it have been selling for 590-640k, and then suddenly close at 710 a couple months later, while more desireable homes languished in the 600s!

http://thisoldhouseflip.blogspot.com/2006_10_08_archive.html

From web site:

The best value in San Marcos:

362 EDGEWATER DR, SAN MARCOS

Since “best value” is inherently a subjective term I submit this 3174 sq ft home built in 2004 consisting of 5 Br, 4 Ba on a 9350 sq ft lot. Even though the owner is asking $589,900-$639,900, or approximately $186-$202/sq ft, the home is at the low end of similar homes. The one draw back (and a deal breaker for me) is the $380 per month HOAs and Mello-Roos (that is a car payment on a BMW for the next 30 years). So there you have it folks, some descent examples in the city of San Marcos.

[Anonymous]

It’s midnight, the kids are asleep and I am bored!

I could have guessed, our property above is currently FOR RENT through Help-U-Sell for 2450/Mo! So apparently someone overpaid by about $100,000 only to turn around and rent the property. Sound familiar?

[SD Realtor]

Well Juice I am up as well… Looking at resumes for a receptionist for my wifes business. Just ran across one from a Realtor…no joke!

Okay so yeah this is a bizarre sale. I saw all the expired and cancelled listings for this home. The sale closed but was not an MLS sale. Maybe the seller found a sap and did a FSBO and the sap never did any research on the home. The loan was originated by New Century for 568k…

SD Realtor

[Anonymous]

Interesting! It is curious how the same home on the next street up (120 homes in this community total) sold for 710k a week earlier. Also, at the time both homes sold, there were 8+ homes for sale in this neighborhood (15+ last October) and many were cheaper and much more desirable.

These two are right on top of the new Sprinter train and have small yards. Also, the fact that it was not sold through the MLS or a realtor seems even stranger. Add to that the fact that it for rent and it really starts to look suspicious! O ya, and at that loan amount, they will be paying a grand total of $4,000/Month for this place and only renting for $2,450.

Here’s a possible scenario: Seller accepts, say, 625k, but agrees to sell at 710k and funnel back 85k in proceeds to buyer after escrow closes. Seller is desperate, as this guy clearly was. Buyer immediately rents the home, takes a loss every month and uses the 85k for other ventures. Or, he does all this for a Filipino nurse client who is being scammed.

[SD Realtor]

Could be… I would definitely agree with you that something is definitely fishy here… I just cannot believe the buyer would be that much of a boob in a market like this.

SD Realtor

[Bugs]

I have to wonder what that appraisal looks like. While I’m at it, I have to wonder how many appraisals this sale will be used in.

[Anonymous]

Bugs,

Exactly, these two sales now become the comps and everything looks great, when in fact the exact opposite is the case. This neighborhood (going back to scams as earlier as 2004) could be the posterchild for borderline bubble fraud.

Granted, there is a chance that this is legit, but then why do we have the following, each of which is unusual, all happening at once:

-Overpaid by 75-100k
-Happened with two similar homes in 1 week
-Rented immediately after closing
-$1,500/Month loss (4k payments, 2.5k rent)
-Sold FSBO, no realtor fees, yet still 100k+ higher than asking price. FSBO alone is very rare.

[HereWeGo]

I take it there is a second mortgage on the property? Who is the second lender?

Are the properties rented, or still seeking renters?

[Anonymous]

Currently for rent here:

http://www.helpusell.com/Consumer/Listing/ListingDetail.aspx?Search=94bb4afc-caa7-4135-a9be-5b669416a8c4&Listing=18202558&IRPAgentID=9664410&Image=1&First=1&Last=1&pagesize=10&SearchType=&ListingDistrictTypeID=&FirstLetter=&Sort=6&Cookies=

[Duck]

I don’t know anythng about that community, but judging by the MLS activity and tax records it looks like there was a huge amount of speculators buying there. Looks like it’s quite a melting pot as well. A quick check of the tax records revealed about 10 different countries being represented and several short sales already including on after only 6 months. That person probably didn’t ever make a payment and had no intention of doing so. Crazy.

[HereWeGo]

Sounds like that community might have an REO or two around Labor Day.

[Anonymous]

Yes, The diversity there is great. I know someone in that community and on his street alone there are whites, a guy from france, blacks, hispanics, chinese, filipinos, iranians, vietnamese, a white/black couple and 2 x white/hispanic couples. All they need is a family of bangladeshi refugees and an australian aborigini and they will have the globe covered.

[Cow_tipping]

What even better is that these people are all in the same house …
Cool.
Cow_tipping.

[SD Realtor]

Herewego, I had only looked at the first property that juice mentioned and no there was no 2nd. Only a first for 568k.

SD Realtor

[Author]

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